The U.K.’s planned Green Investment Bank should be able to issue bonds to help finance clean-energy projects such as renewable technologies from April 2013, the head of an environmental think-tank said.

“The earlier bonds are issued, the faster we should get the Green Investment Bank leveraging off institutional investors and deploying capital at the scale the low-carbon transition needs to meet our carbon targets and economic imperatives,” said Peter Young, chairman of the London-based Aldersgate Group.

Young, who has met with Treasury and other officials to discuss the bank’s scale and progress, said he wanted to see the institution issue green bonds early in 2013 to get longer-term investors into environmental projects.

“The particular attraction of bonds is they’re a form of financing that some of larger institutional investors feel comfortable in trading in and investing in,” he said.

The government says at least 110 billion pounds ($174 billion) is needed by 2020 to replace aging power plants, upgrade the grid and build renewable-energy projects. Lack of appropriate finance might threaten the U.K.’s pace to a low- carbon economy, Business Secretary Vince Cable has said.

A spokeswoman at the Department for Business, Innovation and Skills said no decision had been taken and how the bank, as an independent body, will borrow will be decided in due course.

The institution will be able to borrow from 2015 or 2016 provided the U.K.’s debt is falling as a percentage of economic output, a criteria that Young said should be lifted.

“If the Green Investment Bank can show itself to be a really robust institution making some good and sensible decisions, I don’t see that deficit rule as being very relevant,” he said.